Dividend Yield

Dividend yield is the annual dividend per share divided by the share price — the cash return you earn just for holding the stock, before any price change. A $50 stock paying $2.00 a year yields 4%.

Yield moves inversely with price: the payout is fixed until the board changes it, so a falling stock mechanically pushes the yield up. That is the yield trap — an 11% yield usually is not generosity, it is the market pricing in a cut. Checking the payout ratio tells you whether earnings actually cover the payment.

Context: the S&P 500 has yielded roughly 1.2-2% in recent years, utilities and REITs commonly 3-5%. Compare a stock's yield to its own history and its sector before calling it high or low.